Risk and risk management

Instalco’s operations, like all business activities, involve various risks. For a detailed description of these risk factors, please refer to the company’s latest annual report.

Instalco manages risks from a holistic perspective. A central part of the Group’s business model is the concept of “balanced risk”, which aims to ensure profitable business with a reasonable risk level. Balanced risk is based on strategic principles for risk management within three main areas:

Internal structure

• Acquisition of profitable and experienced companies: Instalco strives to acquire profitable companies with long-standing experience in their respective industries.
• Retention of existing customer structures: Instalco consists of local units acquired by the Group, which retain their customer structures even after joining Instalco. These local units therefore possess deep knowledge of their markets and customers.
• Large number of local units: Instalco has over 150 local units across five business areas and different geographic markets, providing solid risk diversification for the Group as a whole.
• Flexible cost structure: Instalco has a large share of variable costs (for the full year 2024, the company’s costs were distributed as follows: 36% materials, 39% personnel, 15% subcontractors, 2% transport/equipment, 8% other). The Group can therefore quickly adjust costs when market demand changes, both in general and for specific services or regions.

Market and customer structure

• Clearly defined geographic market: Instalco focuses solely on the markets in Sweden, Norway, Finland, and Germany, where the Group has extensive expertise.
• Recurring customers: Approximately 80% of Instalco’s customers are recurring, providing strong insight into customer needs and long-term relationships.
• Wide customer diversification: Instalco has over 2,000 customers, with the five largest accounting for about 11% of revenues. Instalco’s customers, like Instalco itself, often have decentralized structures, meaning that procurement decisions are made locally. This creates many individual relationships between customers and Instalco’s local units.
• Strict internal decision model: The company applies a clear authorization structure, where project approvals are made at different levels depending on project size. Smaller projects can be approved by the local unit’s managing director, while larger projects require approval from higher levels in the organization, such as business area managers, division heads, the Group CEO, the Chairman of the Board, or, in some cases, the full Board. This ensures control, risk management, and quality in the decision-making process.

Type of assignments

• Instalco mainly operates in the mid-segment of the installation market: Instalco believes this segment combines size and project risk in an optimal way. The company also undertakes larger projects selectively, mainly through partnering models. Instalco consistently has several thousand ongoing projects at the same time, focusing primarily on projects with an order value between SEK 1 million and SEK 75 million. Currently, more than 80 percent of our revenues from projects, excluding service, come from projects within this range.
• Balance between fixed-price and variable-price projects: Approximately 44% of Instalco’s projects are carried out as fixed-price contracts, just over 30% as partnering projects, and the remainder within other compensation and collaboration models.